Driving into the ‘Year of India’!

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Peter Kronschnabel, President, BMW India, has stepped up the accelerator. And he has no intention of applying the brakes...

For decades, car aficionados globally have been irresistibly drawn to the panache, grandeur and sophistication that Bayerische Motoren Werke (in German) or Bavarian Motor Works (in English) represents. Confused? Well, the cars go by the popular sobriquet of BMW. Guess that resolves any question marks that mar your thinking. The auto-maker not just stands testimony to German engineering and sophistication (like Mercedes Benz does), but has surpassed that finishing line to become the answer for thousands who seek both elegance and performance. The last few months have been good for the world’s largest maker of premium cars; BMW’s US sales rose by 8.7%, while its global sales rose by 3% on the back of burgeoning demand for its 3-series convertible.

So, the last frontier really left for the German auto maker was to conquer the booming Indian auto market and over the last year, it focused on doing precisely that. BMW dashed ahead to first establish a sales subsidiary in Gurgaon last year, followed by a state of the art assembly plant for BMW 3 and 5 series (with an initial investment of Rs1 billion), which began operation in Chennai earlier this year. A booming economy (it grew at 9.4% in 2006-07), rising affluence and increasing demand for luxury cars (in 2005-06, 27,529 units were sold, whereas in 2006-07, a staggering 40,964 units were sold – a growth of almost 50%), are only a few reasons attributable to BMW worldwide declaring 2007 as its ‘Year of India’.

And this was the first thing affirmed by Peter Kronschnabel, President, BMW India, when he sat down for tête-à-tête with 4Ps B&M. Here to lead the ‘2007–Year of India– for BMW’ declaration made by his global CEO, Kronschnabel is quite optimistic about the unfolding scenario in Indian luxury car segment. “India has a strategic importance at BMW. The top end luxury car market in India is small, but it is growing at a brisk pace. It was 3,000 units last year and it is expected to become a 10,000 unit segment by 2010 – almost triple,” he opines. Small wonder that despite the low volumes in production and sales presently, the company is bullish about its future prospects here.

Born in Villingen, Germany in 1966, Kronschnabel began his association with BMW in 1995 as sales and marketing intern. His persistence and diligence first earned him the rise to the level of GM– Market Development – Region - Asia Pacific, Africa and Eastern Europe, and a few months ago, he arrived as President of the luxury car company in India. And Kronschnabel says that the vision of BMW in India is to be BIG! “An understanding of producing and retailing premium cars to the customers is very important from the entry level of the chain itself. It is a challenge, an effort to show that one can be successful in an on-going, long term process.” Having experienced different work cultures in numerous countries, the man draws out the differentiation for the indigenously Indian work culture and says. “In India, you work with well-skilled workers, motivated young people, who are at times over enthusiastic, but are able to come out with results, without having a plan in the first placel” he shares.

Since its inception in 1917, BMW has been phenomenally successful with the Mini, MG and Land Rover as its luxury mascots, with the present portfolio having model lines like the BMW 1, 3, 5, 6 and 7 Series, BMW X3, X5 and Z4, MINI (One, Cooper, Cooper S, Convertible) and the Rolls-Royce Phantom.

BMW is also seeking space for the future and is positive about launching its Mini series by 2009. Kronschnabel feels that the time is just right for its entry. The company’s Long term strategic approach in India involves launching the 5 series in June and promising exciting times ahead with launches of the X3 and X5. Even a few models from the world famous BMW Art Cars Collection will drive into India later this year. They hope to sell 1,200 units by year-end.

Kronschnabel also emphasizes on significance of launching diesel variations of BMW’s existent car models in the Indian market, which will increase and stabilize sales at a better level. The vision is to give the consumer a flexibility of choice, in the long run.

Boasting a global production network in 23 locations across 16 countries, BMW is gung-ho about the Chennai plant, and hopes that it will match the production capacity of its South Africa plant. “Nearly 50,000 cars are produced at the South African plant, set up in the 70s, of which 30,000 cars go for exports. We will try maintaining similar standards in India.”

Keen to develop a robust dealer network in India, Kronschnabel avers that BMW has even set clear and uniform standards for every dealership. “The experience with which the customers get the product and services is important and is what separates the company from its competitors,” he states. Talking of competitors, there are already quite a few in the Indian market, gearing up to spoil the BMW party, including hi-profile global brands like Mercedes, Audi, Bentley & Porsche. And as the man at the helm of BMW’s India ambitions, Kronschnabel may have tough days ahead, but surely not impossible to manage, especially when you are behind the wheels of the ultimate dream machine!

Edit bureau: Siddharth Nahata, Vantika Singh

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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